New affordable housing supply sees over 47 per cent QoQ jump – from 20,800 units in Q4 2018 to 30,750 units this quarter

Annual housing sales rise 58 per cent, new launches up by 91 per cent across the top 7 cities

Defying previous election year trends when sales and new launches remained muted during this period, Q1 2019 saw both housing sales and new supply rise due to multiple Government sops in the first three months of 2019. Anarock Property Consultants' data shows that housing sales rose by 12 per cent and new residential supply by 27 per cent QoQ due to sops in the interim budget, GST rate cuts and lowering of home loan rates post RBI’s recent repo rate cut.

Of the total new supply, affordable housing saw the maximum share at 44 per cent. However, overall unsold inventory across the top cities saw a meagre 1 per cent declinein Q1 2019 over the previous quarter. Unsold housing stock stands at 6.65 lakh units as of Q1 2019.

Pune and MMR were the top performers with new housing supply increasing by 160 per cent and 62 per cent respectively. Housing sales in these two leading Western region cities saw a maximum increase in the quarter by 24 per cent and 19 per cent respectively.

“While we anticipated a negative spill-over impact of the NBFC crisis in the first quarter of 2019, housing sales and new supply assumed an upward trajectory," says Anuj Puri, Chairman, Anarock Property Consultants. "The sector is currently riding on a new wave of optimism following the triple benefits it received from the Government in the first three months of 2019. These sops have not only increased homebuyers’ sentiments but will also boost the confidence of builders and long-term investors.”

“Despite a 1 per cent hike in stamp duty and registration charges in Maharashtra, MMR and Pune markets performed significantly well as far as new launches and housing sales are concerned," says Puri. "With project approvals in place, builders in these regions had been waiting for an opportune time to launch their projects, and the prevailing upbeat buyer sentiments was a major kickstart.”

Q1 2019 new launch overview

The top 7 cities recorded new unit launches of around 70,490 units in Q1 2019 (as opposed to 55,600 units in Q4 2018) – a quarterly increase of 27 per cent

Key cities contributing to Q1 2019 new unit launches included Mumbai Metropolitan Region (MMR), Pune, Bengaluru and NCR, together accounting for 87 per centof new supply

Approx. 17,520 units were launched in Pune – a whopping rise of over 160 per cent from Q4 2019. More than 45 per cent of new supply was added in the affordable segment

MMR added approx. 26,850 units in Q1 2019 – a significant quarterly increase of 62 per cent over the previous quarter. More than 70 per cent new supply was added in sub INR 80 lakh price bracket.

NCR new launches recorded a drop of 9 per cent from the previous quarter with approx. 8,030 units launched in Q1 2019

Chennai added 3,170 units in Q1 2019 – a decrease of 19 per cent over the previous quarter

In Kolkata, new launches recorded a massive drop of 75 per cent from the previous quarter, with approx. 1,000 units launched in Q1 2019. The city saw the least new supply in the quarter among the top 7 cities.

City-wise New Supply (in units) and Q-o-Q percentage change

Cities Name

Q1 2019

Q4 2018

per centChange (Q4 2018 vs Q1 2019)

Q1 2018

per centChange (Q1 2018 vs Q1 2019)

NCR

8,030

8,800

-9 per cent

4,540

77 per cent

MMR

26,850

16,590

62 per cent

9,490

183 per cent

Bengaluru

9,070

11,610

-22 per cent

7,320

24 per cent

Pune

17,520

6,730

160 per cent

2,750

538 per cent

Hyderabad

4,850

3,940

23 per cent

3,680

32 per cent

Chennai

3,170

3,900

-19 per cent

2,720

17 per cent

Kolkata

1000

4,030

-75 per cent

6,470

-85 per cent

Total

70,490

55,600

27 per cent

36,970

91 per cent

Source: ANAROCK Research

The ripple effect of the NBFC crisis Q4 2018, coupled with the usually slow pre-election sentiment, could have played spoilsport for both new launches and housing sales in Q1 2019. However, the Government's various interventions have had not only a buffering but a boosting effect. Working closely with the RBI, it has been successful in curtailing the liquidity crisis in the sector.

On a yearly basis, new launches across the top 7 cities together saw a 91 per cent jump in Q1 2019 against the corresponding period in 2018. Similarly, housing salessaw a yearly increase of over 58 per cent in the top cities – led by MMR, Pune and NCR with an increase of over 95 per cent, 80 per cent and 52 per cent respectively.

Q1 2019 overall sales overview

Around 78,520 units were sold in Q1 2019 with NCR, MMR, Bengaluru and Pune together accounting for 84 per cent of the sales.

Pune recorded the highest jump in sales in this quarter as compared to other top cities. City sales increased by 24 per cent – from 9,940 units in Q4 2018 to 12,340 units in Q1 2019 due to a significant increase of 160 per cent in new launch supply.

MMR came in second with a significant jump in sales in Q1 2019 as compared to the other top cities. City sales increased by 19 per cent – from 20,220 units in Q4 2018 to 24,010 units in Q1 2019.

Sales in NCR and Hyderabad increased by 8 per cent each over the previous quarter with 13,740 units and 5,400 units respectively.

Sales in Bengaluru and Chennai increased by 5 per cent and 4 per cent respectively over the previous quarter and were recorded at 15,580 units and 3,430 unitsrespectively

Kolkata sales rose by 4 per cent – from 3,860 units in Q4 2018 to 4,020 units in Q1 2019.

City-wise Absorption (In Units) and Q-o-Q percentage change

Cities Name

Q1 2019

Q4 2018

per cent Change (Q4 2018 vs Q1 2019)

Q1 2018

per cent Change (Q1 2018 vs Q1 2019)

NCR

13,740

12,730

8 per cent

9,070

51 per cent

MMR

24,010

20,220

19 per cent

12,300

95 per cent

Bengaluru

15,580

14,820

5 per cent

11,690

33 per cent

Pune

12,340

9,940

24 per cent

6,850

80 per cent

Hyderabad

5,400

4,990

8 per cent

4,050

33 per cent

Chennai

3,430

3,290

4 per cent

2,420

42 per cent

Kolkata

4,020

3,860

4 per cent

3,420

18 per cent

Total

78,520

69,850

12 per cent

49,800

58 per cent

Source: ANAROCK Research

Despite the increase in launches and overall absorption in the top 7 cities during Q1 2019 over the previous quarter, overall unsold inventory decreased by a meagre 1 per cent – from 6.73 lakh units in Q4 2018 to 6.65 lakh units by Q1 2019. The yearly decline was over 7 per cent – from 7.13 lakh units in Q1 2018 to 6.65 lakh units in Q1 2019.Bengaluru witnessed the highest reduction in unsold inventory by 27 per cent from Q1 2018 to Q1 2019.

Pricing trends

Average residential prices across the top cities remained stagnant in Q1 2019 when compared to the previous quarter – except in Bengaluru and Hyderabad, where the average property prices increased by 1 per cent each over the previous quarter and by 2 per cent in a year.

All in all, the realty sector looks all geared up in 2019. The slash in GST rates to 5 per cent for premium homes and 1 per cent for affordable homes without ITC gives the beleaguered realty sector the much-needed breathing room and will certainly help in maintaining forward momentum over the next three quarters of 2019.

Also, the booster shot given by the Government by changing the budget-specific definition of affordable housing and extending it to